CBS goes dark on Time Warner Cable

About 2 million Time Warner Cable customers in Orange County and Los Angeles lost their CBS and Showtime channels mid-afternoon Friday, after the cable giant and network failed to reach agreement over transmission fees.

Time Warner Cable's blackout of CBS continued Saturday, and neither side indicated a resolution of their dispute over fees is imminent.

Each has accused the other of making unreasonable demands. On Saturday the two sides even seemed to disagree on the status of negotiations. A Time Warner spokeswoman said Saturday that negotiations are ongoing. CBS said it expects talks to resume soon, but the decision rests with Time Warner.

The two media companies have been locked in battle over how much Time Warner should pay to transmit programs from CBS and CBS-owned channels. Time Warner threatened to pull the plug several times in the past week – including a short blackout Monday night before negotiations were extended.

Just after a mutually agreed-upon 2 p.m. deadline Friday, Time Warner cut off CBS in Southern California and seven other U.S. metro areas. As a result, KCBS/2 and KCAL/9 were blacked out for local Time Warner customers as well as Showtime, The Movie Channel, Flix and the Smithsonian Channel.

When Time Warner customers tuned to those channels, they got a blue screen with a message from the cable company blaming CBS for the outage. The message ended with the signoff "Time Warner Cable, Enjoy Better."

The blackout meant no "Undercover Boss" Friday night and, depending on how long the dispute lasts, no "60 Minutes Sunday" or "Under the Dome" on Monday.

CBS sports fans will miss out live coverage beginning today of the World Golf Championships: Bridgestone Invitational. Tiger Woods was leading heading into third-round coverage. On Thursday, the PGA Championship will begin and the Wyndham Championship is set to broadcast Aug. 17. Preseason NFL football on CBS does not begin until later this month.

Both companies have major stakes in the outcome of the dispute.

Time Warner is attempting to keep a lid on costs. Broadcasting & Cable said CBS is now receiving between 75 cents and a $1 per subscriber per month from Time Warner Cable, according estimates by the investment firm RBC Capital. Industry analysts say CBS wants to double that to $2.

CBS has been the most-watched broadcast TV network for 10 of the past 11 TV seasons, according to the Nielsen Co. The network has built its numerical advantage by dominating among viewers 50 and older, while its rivals pursued the 18-to-49 demographic that advertisers prefer.

For the first time in 21 years, however, CBS placed first in viewership among 18- to 49-year-olds during the 2012-13 season, while holding on to its 50-plus stronghold.

Last week, CBS aired eight of the 10 most-watched shows on TV, with "Under the Dome," "60 Minutes," "The Big Bang Theory," "NCIS," "Unforgettable," "Two and a Half Men" and two episodes of "Big Brother" all finishing in the top 10.

CBS said it was the first time its programming had been dropped from a cable company.

"We deeply regret this ill-advised action, which is injurious not only to our many affected viewers, but also to Time Warner Cable itself," said CBS in a statement. "Throughout this process, Time Warner Cable has conducted negotiations in a combative and non-productive spirit, indulging in pointless brinksmanship and distorted public positioning – such as the fictional and ridiculous 600 percent increase CBS supposedly demanded – while maintaining antiquated positions no longer held by any other programming distributor in the business."

Time Warner defended its position.

"Unfortunately, CBS is unwilling to compromise in any way," said Time Warner spokesman Dennis Johnson. "We've negotiated thousands of agreements with broadcasters and programmers over the years and the terms they are insisting on are not even close to customary or reasonable."

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